SN Magazine

Stop Making Savings Excuses

The January 2015 issue of School Nutrition encouraged readers to make fresh resolutions about improving their personal finance savvy. Why aren’t you taking purposeful steps to saving your pennies? Following are some common excuses—and reasons to stop using them.

“Money’s too tight as it is.”

Although few of us are perfectly content with our income, you may have very legitimate reasons for feeling like you can’t possibly put anything aside. Do it anyway, because it’s likely that money will still be “too tight” when you need an emergency car repair, your daughter has her heart set on a nice prom dress or you want to attend your parents’ 60th wedding anniversary reunion in another state. Start with a very, very small amount, if that’s what it takes to get in the habit of making this a financial priority. Seek creative ways to cut your living expenses and put aside what you can each month.

“I like to live in the moment.”

Training yourself to save while also allowing yourself little luxuries and impulse purchases are not mutually exclusive strategies. This is why general budgeting can be a helpful practice. After you budget all your monthly “must” expenses (home, food, utilities, transportation, etc.), determine how much average discretionary cash you have left. Whatever it is, identify a percentage that you will commit to putting into savings. More is better, of course, but the key is to setting a minimum and moving that into savings as soon as you get your paycheck and pay your monthly musts. Monitor this and your “in the moment” spending for six months to adjust as necessary. Maybe you will find that you can afford to put more in savings without sacrificing the little luxuries. Or perhaps you will decide to cut back a little, simply to ensure that you keep following through on your commitment—and burgeoning habit—to put at least something away.

“I’ll start saving later.”

How is that excuse working for you when it comes to dieting, quitting smoking, upping your exercise or any other practice that feels like a chore? There is no time like the present. Listen to the “logical” part of your brain that will remind you how foolish it is to expect a major life circumstances change that will make adopting this new financial habit any easier in the future. (In short: Stop waiting for a lottery win or a long-lost inheritance.) Procrastinating on saving money essentially means procrastinating on all the dreams your savings will help you achieve!

“I don’t have kids.”

It may be true that other families you know focus their current savings strategy on helping their children pursue future college dreams. Not having that same financial pressure is a silly excuse to put off saving for other financial milestones that will are sure to come your way as you age, from buying a home to ensuring a comfortable retirement to recognizing the rising costs of care should your golden years be tarnished with health issues.

“I have to help out my parents/adult children.”

The safety instructions at the start of every airline flight include a caution to put on your own oxygen mask before assisting someone else. This is a good metaphor for managing your finances. It’s completely natural to get caught up in wanting to help a loved one who has not made the best financial decisions or who is confronting a serious emergency. (That’s one good reason to start saving now—to be in a financial position to be able to extend that generosity.) But you shouldn’t let it compromise your own financial security—for now or for later. Look for creative solutions to help but not necessarily to rescue, especially if the need is part of a repeating pattern. Consider making a financial loan instead of a gift, with signed paperwork to ensure accountability. Help that loved one identify resources for credit counseling or financial assistance programs. If there’s no other option than a “bail-out,” do it and move on, adjusting your budget, so that you can look to cut where you can in order to replenish your savings at a faster rate.

“I can tap my home equity or 401(k) or take out a loan if I have an emergency.”

It certainly can be comforting to have a financial safety net should disaster strike. But consider the varying levels of “disaster.” Do you really want to compromise those secure assets (and incur taxes, penalties and such) for a short-term emergency that could have been covered had you been saving for such a possibility? Remember, those significant financial assets are going to be critical resources when you are no longer working—for whatever reason. What happens if and when disaster with a long-lasting consequence strikes? Maybe it’s a health crisis or perhaps you’ve lost your job 10 to 15 years ahead of when you expected to retire. You want to protect those assets so they can help support you over the long haul.

“I’m too young.” “I’m too old.”

When you’re 25, age 50 seems very far away. Even when you’re 35 or 40, you may still feel like you have plenty of time to save for the big, bad scary future. But before you know it, the future is now—or it’s right around the corner, and the time you have to prepare financially is remarkably reduced. That can lead to its own depressed excuse: “Now, it’s too late for me to save.” It’s never too early and it’s never too late to start showing some financial sense. What’s the worst that could happen? You wind up having more than you require to meet the needs of your last years? Draft a will and leave it to the next generation or a charity.

“I want to live for today.”

No one wants to be Ebenezer Scrooge, trading a miserable life today for the cold comforts of tomorrow. Plus there is truth in the adage about living it up today, for tomorrow we may die. It’s almost unbearable to think that we might be sacrificing things we want now, when we might not be around to tap into our savings later. The key is to find a balance, so that you position yourself to be able to enjoy every day—whether you have 7 days left on Earth—or another 70 years.